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The Biden Administration could couple releases from the Strategic Petroleum Reserve (SPR) with a longer-term policy to support the U.S. oil industry if it wants to reduce the soaring gasoline and oil prices and ensure America’s energy security, Mike Wirth, chief executive at supermajor Chevron, said on Tuesday.
The U.S. Administration is discussing another SPR release to ease the upward pressure on oil prices which shot up to over $100 per barrel after Russia invaded Ukraine.
According to Chevron, an SPR release is a short-term remedy, while ensuring a long-term energy security—especially in light of Putin’s war in Ukraine—could be achieved through a “balanced and pragmatic conversation.”
A new SPR release would best serve energy security if it is accompanied by “an attitude to support investment in U.S. resource development,” Wirth said on a call during Chevron’s investor day, as carried by Bloomberg.
Support to the domestic oil and gas industry would “ensure that this country remains strong from an energy security standpoint,” Chevron’s top executive said.
The Biden Administration continues to press for a green energy transition and has called several times on the OPEC+ group over the past months to ramp up production more than planned to tame surging oil prices and support the economic recovery from the pandemic.
U.S. oil executives, however, have felt ignored.
Earlier this week, Devon Energy’s chief executive Rick Muncrief told Bloomberg, “I’m a little mystified that there hasn’t been some dialog,” referring to the lack of dialogue between the U.S. Administration and the U.S. oil industry.
“If they were to reach out and maybe be a little more collaborative, it might provide some cover,” Muncrief said.
Yet, White House press secretary Jen Psaki said earlier this week that a proposal by Republican lawmakers to increase U.S. crude oil production amid the fast-deteriorating conflict in Ukraine that could compromise the security of energy flows was a “misdiagnosis.”
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com